Greetings Belgoboy,I'll be a future retiree since I too am young at 26.but I can't seem to make my mind up between creating an ira with VFINX or with VTSMX, as well as just how many stocks or funds is it ok to start with as an ira. I like to view this question as whether I'd want the whole market(VTSMX) or just the top ones(VFINX) as the mandate of the S & P 500 : "The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation."For me, I hold VFINX as I like the idea of dividing up the market and investing from various angles, eg my profile notes all my funds that cover a few different market segments.When is too much too much.Which way are we measuring here? I think some people may want an ultra-diverse single fund such as Vanguard's LifeStrategy Growth that has a portion in overseas stocks and bonds as well as half in the US market. Other folks may want to hold a concentrated stock fund that holds only 20 to 30 stocks such as the Oak funds as noted in http://www.fool.com/news/foth/2000/foth000616.htm . Note that in each case the account would be just 1 fund but the diversity of the holdings is huge.For some people keeping things simple works great and these are the folks that likely have only a few funds or less. Others though may want to hold over a dozen funds before they feel comfortable and as long as each fund has a purpose and fits into a plan then I don't think I see a problem with it. For myself I estimate I'll have 6 funds in my portfolio although if I ever work where there is an employer plan then that number may go up by a couple but this is a route that seems to be the mix that makes sense to me. Some advocate a 3 fund portfolio while others may suggest holding at least 10 and each investor has to decide where on the spectrum they want to be.This is likely a rehash of what I've posted before on the Index Funds board, but hopefully this explains my view on things.Regards,JB
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